When AEG pledged $35 million over five years to start a professional cycling race in California, CEO Tim Leiweke said AEG would foot the entire bill if it couldn’t find sponsors to help.
 |
George Hincapie (front), who helped Lance Armstrong
(in yellow jersey) win his seventh Tour de France last
summer, will ride for the Discovery Channel
team in the first Tour of California. |
He needn’t have worried.
With the addition last week of Google and Adobe, the Amgen Tour of California’s roster of partners had swelled to 16. At the same time, the potential financial loss for AEG on this year’s eight-stage race, which was to start Sunday and will end next weekend, was dwindling ever closer to a million dollars or so.
That’s quite a beginning for a race that hadn’t even been announced at this time last year, but AEG’s success at signing sponsors is only part of the story.
The bigger deal is the list of world-class cyclists riding the eight-day, 600-mile tour. The teams and riders are familiar to anyone with even a passing interest in the sport. Among them are Lance Armstrong’s Discovery Channel team, featuring Armstrong’s Tour de France lieutenant, George Hincapie. Also on the list is Team CSC, with American rider Bobby Julich, and T-Mobile, defending Tour de France team champion.
Getting commitments from those teams put AEG a long way toward reaching its lofty goal for the race.
“We see the opportunity to grow this into an event that can be mentioned in the same breath as events in France, Italy and Spain,” said Shawn Hunter, president of AEG Sports. “We’re committed to building this into one of the more important cycling events in the world.”
The idea for a multistage California cycling tour wasn’t original to AEG. For decades, Hunter said, many supporters of U.S. cycling believed that there could be no better backdrop for a race than California, with its varied terrain, moderate climate and crowds of enthusiastic cyclists.
With the exception of the annual Ford Tour de Georgia, though, high-level cycling events have had little success in the United States. That’s why AEG’s initial five-year commitment drew a lot of enthusiasm.
“We wanted to make a statement that we’re serious,” Hunter said. “We wanted to send the message that we’re going to do it and we’re going to do it right.”
Among the companies that got the message was Health Net Inc., a publicly traded managed health care company that not only sponsors a cycling team but also gets $6 billion of its $11 billion in annual revenue in California.
“We believe in AEG,” said Health Net spokeswoman Krista Shepard. “They are very committed to the sport of cycling.”
All but two of the sponsors signed on for multiple years, including Amgen, a biotech company whose three-year deal to title the race prompted criticism from some media outlets and people in the cycling industry. Amgen is the company that invented synthetic EPO, a substance created to help dialysis patients combat anemia but that has also been used by some cyclists as a hard-to-detect performance-enhancing substance. An Amgen spokeswoman said the company anticipated the criticism but thought the race would be a valuable platform from which to promote its antidoping stance and the appropriate use of its products.
AEG is hopeful that the spectator count along the course will approach one million, and that many more will watch ESPN2’s nightly, one-hour, prime-time show covering the race, though ratings will doubtless be affected by the Winter Olympics on NBC.
Regardless of the number of viewers and spectators for year one, though, Hunter said AEG is happy with its results so far, even as its estimates for five-year spending have grown from $35 million to $40 million.
“We will lose seven figures this year, but we anticipated that,” he said.
If projections hold, he added, AEG will be in the black by year three.
